GoPro's (GPRO) Price Target Raised to $85 at FBN

FBN Securities maintained an Outperform rating on GoPro (NASDAQ: GPRO) and raised its price target to $85.00 (from $80.00). The change follows strong Q2 results. Analyst Shebly Seyrafi noted unit growth, impressive GMs, and strong Asia and China growth.

"The company reported very strong capture unit growth (93% Y/Y) with 1.647M units shipped being 13% above consensus of 1.460M units. Moreover, its GM of 46.4% exceeded the 45% guidance and is still nicely above its LT target of 42-44%. With the company’s recent entry into China, the company’s Asia-Pacific revenue grew by 183% Y/Y and 60% Y/Y to $70M in FQ2 (accounting for 17% of revenue. up from 10% the year before)," said Seyrafi. "We estimate that China is now ~1/3 of Asia-Pacific revenue (so ~6% rev. from zero in December)."

"The concerns in the report – lower capture device ASP, inventory increase, and higher capex – were relatively minor (see below). Although GPRO has diverged a bit from its previous pattern of only releasing new capture devices at the end of the year as it recently launched its HERO+LCD on June 1 and its HERO4 Session (light and small) on July 6, the large R&D% (12.9%) and the large increase in inventory (219M vs. $164M in FQ1 and $117M a year before) suggest that the company is already making plans to launch a HERO5 capture device in FH2 (note that last year it launched its HERO4 on Sept. 29). We think that such a camera may have video encoding at 4kp60 (vs. current 4kp30)," added the analyst.

For an analyst ratings summary and ratings history on GoPro click here. For more ratings news on GoPro click here.

Shares of GoPro closed at $62.04 yesterday.

You May Also Be Interested In

• Dollarama Inc. (DOL:CN) (DLMAF) PT Raised to Cdn$231 at Bernstein SocGen
• Glenmark Pharmaceuticals Ltd. (GNP:IN) PT Raised to INR2,750 at Investec
• Rackspace Technology Inc. (RXT) PT Raised to $5.50 at UBS